WIPP Reaction to the 2015 State of the Union Address
Wednesday, January 21, 2015
SPECIAL EDITION: WIPP WORKS IN WASHINGTON
by Ann Sullivan, WIPP Government Affairs
What the State of the Union Speech Didn’t Mention, But You Need to Know
WIPP is all about the economic growth of women-owned businesses. So, our ears were tuned to the President’s State of the Union (SOTU) speech to Congress, listening for anything business/economic related. The tone of the speech exuded a new optimism about the strength of the U.S. economy -- a welcome change from the gloom and doom narrative of years past. Whether you believe the President’s numbers or Republican numbers, economic growth is good news for women business owners -- no matter who takes credit. Simply put, more consumer spending equals new business opportunities.
Although less widely discussed, the party not holding the Presidency, gives a response to SOTU and the Republicans chose the new woman Senator from Iowa, Joni Ernst. Since WIPP works closely with the women in Congress, we were delighted at this selection. She did a good job, avoiding gaffes that some of her fellow male Senators have made in the past.
What The President Said About Business
In his speech, the President mentioned the following statements about business policy: 1) exporting is critical to US business growth; 2) the importance of a trained and skilled workforce that meets the needs of employers; and 3) additional employer obligations to their workforce.
Calling on Congress to approve two trade agreements, the President referred to the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP) with the goal of promoting American exports. He cited that 95% of the world’s customers live outside the US borders.
Creating an educated workforce to meet the needs of businesses, the President proposed making two years of community college free to good students who finish on time. He touted retooling the job training system to create partnerships between community colleges and local businesses.
Employee programs were also a centerpiece of the President’s speech, which have implications for employers. Calling on employers to look beyond their quarterly earnings, the President proposed the following new requirements for businesses: equal work for equal pay, seven days a year of paid sick leave, six weeks of paid maternity leave, raising the minimum wage and paying earned overtime.
What He Didn’t Say
Subsequent to his speech, the President released a fact sheet that goes into greater details about proposals he mentioned in his speech. Here’s what the President did not say in his speech but you should know.
With respect to workforce training, the President’s proposal for two free years of tuition for students at community colleges comes at a price tag of $60 billion. How to pay for this will be articulated in the President’s FY2016 Proposed Budget, which will be released on February 4th. He proposes the “American Technical Training Fund” that would fund private/public partnerships between community colleges and employers to develop work-based apprenticeship programs. States would be able to use any remaining grant funding to this program to reduce costs at four-year public universities and college preparedness training for high school students.
The President outlined a host of new tax breaks for workers. To cover the costs of childcare or care for elderly family members, the President would create a new $500 tax credit. The President outlined a proposal to expand the Earned Income Tax Credit (EITC) to 13 million workers who do not have children but who otherwise meet the requirements. With respect to retirement benefits, the President proposed an additional tax deduction for small employers who offer a 401(k) or other types of retirement savings program. His FY2016 Budget Proposal is expected to lay out in detail how each of these initiatives would be paid for.
It is important to understand that the State of the Union speech is a report to Congress on the state of the government and a forum for proposing new ideas. Most of the ideas mentioned in this article require Congressional or regulatory action. But now is the time to talk about the pros and the cons of these ideas. We encourage you to let WIPP know your thoughts and to contact your Congressional delegation with your reactions. The White House and the SBA are also interested in your reactions. If you don’t know where to start, just ask us.